The application process for secured loans has traditionally been a protracted and inefficient process. The applicant would meet with a salesman who would provisionally offer a loan to the applicant, without knowing whether the loan would meet the lender's underwriting standards. If the applicant decided to accept the loan, the salesman would then request that the applicant complete an application and submit certain documents, such as an appraisal of any collateral to be offered as security. The salesman would then route all of the paperwork to the lender's processing department, where additional documents, such as credit reports, might be requested. Eventually, the documents would be forwarded to an underwriter, who would then determine whether the requested loan met the lender's underwriting standards and if any further documentation was necessary. If the loan did not meet the lender's underwriting standards, the underwriter and the salesman might negotiate the changes to the terms of the loan that would be necessary to meet these standards. After the underwriter and the salesman agreed on terms, it would be necessary for the salesman and the applicant to negotiate with respect to the terms agreed on by the underwriter and the salesman. Any changes agreed to by the applicant and the salesman might require further negotiations between the salesman and the underwriter, et cetera.
This process was inefficient from both the applicant's point of view and the lender's point of view. For the applicant, the protracted nature of the process both delayed the applicant's receipt of the loan proceeds and complicated efforts to compare the terms offered by multiple lenders. For the lender, the involvement of multiple employees with a single loan application dramatically increased the number of man hours necessary to complete a loan, thereby decreasing the lender's profit margins. Moreover, the lack of knowledge of the salesman of the lender's underwriting standards tended to result in the salesman's offer of terms unacceptable to the lender, resulting in further delays.
It is therefore an object of the present invention to provide a system and method for automating the process of processing a loan application so as to decrease the costs incurred by a lender in processing a loan application.
It is a further object of the present invention to provide a system and method for automatically determining whether proposed loan terms meet a lender's underwriting standards.